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The Chinese premier, Wen Jiabao, called for breaking the “monopoly of the big banks,” which in his opinion does not allow firms to finance their development needs, reflected in a speech Wednesday by the official media.
“Some big banks occupy a monopoly position and only in those banks can get loans at other institutions is very complicated,” said Wen.
“What we can do to facilitate the entry of private capital into the financial system is fundamentally broken that monopoly,” he added.
Many Chinese SMEs and private companies have difficulty obtaining loans from state banks, despite the pressures of the Banking Regulatory Commission (CBRC), which called on banks to finance more small and medium enterprises.
Often, SMEs must borrow from agencies outside the banking sector lending to usurious interest (finance news).
With the slowdown in exports, especially to Europe, many borrowers have recently been unable to meet their repayments.
The Chinese government says it wants to fight against usury and last month decided to create an “experimental zone for comprehensive reform of the financial sector” in the region of Wenzhou (this), the scene last year with the escape of several businessmen acogotados the interests charged by lenders clandestine offices.
The reform in the region leading private capitalism in China since the eighties, seeks to “accelerate the development of new financial organizations” promoting private financing in a country where the interest charged by commercial banks are dictated by the central bank and by the market.
“This pilot project in Wenzhou has had some success and some of its components can be implemented nationwide immediately,” said Wen Jiabao, according to the transcript of his words on national radio china.
Nationally, informal loans were assessed last year at about four trillion yuan (452,000 million), 8% of total traded by banks or nearly a tenth of gross domestic product (GDP) Chinese.
Spain on Wednesday placed 2.589 million euros in debt to three, four and eight years, forced to pay higher rates in the first issue after the submission of budgets for 2012 marked by unprecedented austerity measures to reduce its deficit.
Victim of increased tension in the markets, the Spanish Treasury, which wanted to deliver between 2,500 and 3,500 million euros, remained at the lowest level of the fork, the ministry of Finance.
Exceeding EUR 6.555 million, the investor demand was more than twice, but Spain had to pay higher interest rates in three installments (stock market news).
The obligations to three years totaled 1,127 million euros to 2.89% against 2.44% in the last issue of the same maturity, made on March 15.
Bonds to four years in the Treasury placed 973 million euros at a rate of 4.319% on the rise compared to 3.376% from 1 March.
Eight years, obligations issued 489 million euros at a rate of 5.338%, 5.156% compared to the equivalent last auction held in September 2011.
Spain, whose public debt would increase to 79.8% of GDP in 2012 (compared to 68.5% in 2011), according to government forecasts announced Tuesday, is preparing to make an unprecedented budget cuts.
This year should reduce its deficit to 5.3%, after 8.51% in 2011, a goal set by its European partners, concerned about the financial health of the country.
The draft budget presented Tuesday by government to the Congress of Deputies provides for an adjustment of 27,300 million euros.
The President of the European Central Bank (ECB), Mario Draghi, said it was “premature” at this time to introduce any kind of exit strategy from the extraordinary measures taken to address the crisis of sovereign debt in the countries of the euro area .
Draghi was speaking at a press conference following the meeting of the ECB governing council, which decided to keep interest rates (investment) at 1% to the difficulties faced by some peripheral countries of the euro area.
ECB President said that “given the record level of unemployment in the euro area, it is premature to introduce any exit strategy” of measures taken to address the debt crisis.
Unemployment in the euro area in February rose one tenth to 10.8% of the population, a record level not seen for 15 years, with Spain and Greece in the lead with rates of 23.6 and 21% respectively .
Following the meeting of the governing council, the ECB reported that in addition to interest rates also decided to maintain the marginal lending facility, which lends money to banks for a day, at 1.75% and the deposit facility, which paid the money, at 0.25%.
The European Commission (EC) today praised the Spanish state budgets for 2012 are based on a prudent macroeconomic projections and insisted on the adoption and implementation “as soon as possible.”
“It’s a budget that is based on a growth scenario very prudent macroeconomic therefore is not subject to any slight alteration might happen,” he said in remarks to a group of journalists EC spokesman for economic affairs, Amadeu Altafaj .
Altafaj recalled that the economic commissioner, Olli Rehn, has already made a preliminary assessment last Friday in Copenhagen and was satisfied with the general lines of the Spanish accounts, because apparently allowed to meet the deficit reduction targets for this year and the next (5.3% of GDP and 3% respectively).
“It seems that the Government confirmed positive through this budget target (stock charts) of 5.3% deficit in 2012. He puts in a strong position to reach 3% next year and strengthen the confidence in the Spanish economy,” the spokesman said.
Brussels refused to comment yesterday’s statements by the Spanish Minister of Finance, Cristobal Montoro, which claimed that the government of Mariano Rajoy has taken steps since 1 January and denied that it was a budget only for half a year, but Spain urged to expedite as much as possible before Parliament the budget.
“Steps have been taken since the beginning of this new government, but the centerpiece of fiscal consolidation are the budgets, and these were presented today,” the spokesman said.
“It is very important to have a budget as soon as possible, respecting of course all the parliamentary procedure, to take the remainder of this year,” he added.
Regarding the rise of the Spanish risk premium and the worst results of the Spanish debt auction held today, the spokesman declined to elaborate, but said that “it is important to be predictable and responsible acts in the management public accounts. ”
“We confirm that a budget deficit target for 2012 and put the country in a favorable position to meet the 3% in 2013 can only create more trust, confidence and gradually allow the Spanish government financed at interest rates more favorable, “he added.
Regarding the revenue projection that includes the budget, the EC said it has yet to analyze the different chapters: “The budget will be evaluated both the standpoint of revenue as the expenses,” said Altafaj.
On the tax amnesty, the spokesman stressed that it is only a step on budget and can not actually know exactly which generate revenue, the government hopes to enter in this way 2,500 million euros.
The help you spend the OECD Development fell 2.7% in 2011 over the previous year, marking the first decline since 1997, reported today that Paris-based organization.
Spain, down 32.7%, and Greece, with a fall of 39.3%, were the countries that reduced their aid from the list offered the Organization for Economic Cooperation and Development (OECD), in both as a result of the cuts as a result of the economic crisis (stock markets quotes).
Joint assistance from the OECD countries accounted for 135,500 million dollars, representing 0.31% of gross national product (GNP).
The country that contributed the most in absolute terms was the U.S., with a party of 30,700 million dollars, although in relative terms their aid fell by 0.9% compared to 2010.
Turkey, however, was the country that most increased its aid in 2011 (38.2%), followed by Italy (33%), with the latter in which the increase is due to “increased debt relief and increased arrivals of refugees from North Africa, “said the OECD.
The Secretary General of OECD, Angel Gurria praised “the countries that keep their commitments despite the tough fiscal consolidation plans” because “show that the crisis should not be used as an excuse to reduce contributions to the development of cooperation. ”
Development cooperation is not the only financial aid via the poorest countries, but “these hard times of crises also mean less investment and less exports,” said Gurria.
Among the countries that increased their contributions are Israel (14.9%), New Zealand (10.7%), Sweden (10.5%), Switzerland (13.2%) Germany (5.9%) and Korea South (5.8%), while among the most outstanding contribution cut Japan (10.8%), Norway (8.3%), Iceland (18.2%), Austria (14.3%), Belgium (13.3%), France (5.6%) and Luxembourg (5.4%).
“The continuous adjustment of the budgets of the OECD countries will put pressure on aid levels in the coming years,” the OECD said, recalling that the United Nations goal is that development aid from rich countries reach 0.7% of Gross Domestic Product (GDP).
The countries in 2011 exceeded this threshold were Denmark, Luxembourg, Netherlands, Norway and Sweden, while below were Greece, Italy, Japan and Korea, among the major donors, and the Czech Republic, Estonia, Hungary or Poland Israel, including minor contributors.
The aid for the twenty-seven Member States of the European Union (EU) accounted for 54%, reaching 73,600 million dollars, representing 0.42% of gross national product, compared to 0.44% in 2010.
The budget of the Ministry of Research, Development and Innovation (R + D + i), which further depends on science in Spain, will be reduced in 2012 its budget by 1,391 million euros, 26 percent less , especially in the chapter on financial transactions (credits).
This was stated today by Secretary of State R & D + i, Carmen Vela, who has detailed the fine print of the accounts of his department, a total of 3.944 million euros for this year.
Under the proposed state budgets, the secretary of state will have just over 1,642 million euros (475 million less than in 2011) for non-financial transactions (grants) and 2.301 million for financial transactions or loans(finance markets).
For Carmen Vela, the situation is “not easy” and the budget is not what you would have liked to show any satisfactory, although it has assessed that the biggest cut has gone to the credits and subsidies, making , in his view, “less damage” to the R & D + i.
And, as has been reported, last year the budget for the chapter of credits was EUR 3.218 million, but only carried 1.362 million, 42.3 percent.
Vela explained that subsidies have made it through the 600 million below the agreement of non-availability of credit in December to 531 million and then to 475 now.
Human resources are a priority for the Secretariat of State, as Vela, who has stated that it will keep all calls for human resource programs.
However, he said that will not reach the same number of seats, although the quality will be improved.
Has detailed and 1,020 grants were announced subprogramme Researcher Training and is expected to convene the next dates the programs Ramón y Cajal, Juan de la Cierva, Torres Quevedo or Technical Support Staff.
Specifically, the Ramon y Cajal and Juan de la Cierva was going to get around 340 seats (last year was 600).
The replacement rate of public employment for researchers is still zero, but Vela has confirmed that the Treasury is trying to give the nod to a quota for public research organizations so they can hire permanent staff.
The public research organizations will suffer a cut of 4.7 percent on average, of transfers of the Secretariat of State, unless the Canary Islands Astrophysics Institute, which recorded a 30 percent-according to Vela, who has stressed that this decrease does not necessarily affect the closing of schools.
Spain today accused aroused doubts in the market the country’s ability to overcome the crisis and was forced to pay more for an issue of three denominations of medium-term bonds with different maturities.
In total, the Treasury has today placed 2.589 million euros of bonds with different maturities, of which 1.127 million have been to three years with a marginal interest rate (finance) of 2.96%, 2.41% above the previous auction , while another 973 million maturing in 2016 were awarded at 4.368%, 3.478% higher than before.
The remaining EUR 489 million, fixed maturity for October 2020 were placed at 5.363%, three tenths above the 5.194% that this reference was placed in the last issue.
The coverage ratio-proportion between the demand and the amount finally awarded, has been 2.5 times as requests from entities have reached 6.557 million euros.
This implies that the Treasury has not covered the maximum amount provided, 3,500 million euros.
Economy Ministry sources have indicated that the placement is located near the low end of target 2,500 million euros, because the Treasury has sufficient liquidity and no need to force the market.
The same source explains that, until now, Spain has covered 47% of its needs for long-term financing for the entire year.
In total, the Treasury has this year attracted more than 57,500 million euros, of which 186,000 million is expected to issue several times this year to finance maturing debt and to meet new financial requirements of the State.
Having this cushion, continues the same source, allows the Treasury is not going to stop at auctions, as there is no need to put the full maximum amount provided.
The issue today was the first after the presentation of the 2012 general budget, and broke a streak of more than a dozen auctions that the Treasury has managed to pay less for their titles.
However, government sources point out that the average cost of debt issued until March 31 is 3%, compared to 3.90% December 2011.
Analysts say investors are wary of Spain’s ability to meet its objectives: a report from the agency’s risk measurement Standard & Poor’s warned today of the divergence between the countries of central Europe, which will escape recession this year, and south, while expected that Spain will be the only major EU countries with negative growth also in 2013.
The governing council of the European Central Bank (ECB) today held official interest rates at 1%, given the difficulties faced by some peripheral countries of the euro area.
The ECB said in Frankfurt that also maintained the marginal lending facility, which lends money to banks for a day, at 1.75% and the deposit facility, which paid the money, at 0 , 25%.
The European monetary authority has not responded yet to the steep rise in oil prices unlike what he did in July 2008, shortly before the bankruptcy of Lehman Brothers, and April 2011.
A barrel of Brent crude oil (stock market report) currently costs about $ 125 and Texas, about $ 104.
The record level of unemployment in the euro area, with Spain leading the way, and taking advantage of low production capacity, reduce the risk of higher oil prices will trigger higher prices and wages, according to Danske Bank- .
In the press conference at the headquarters in Frankfurt, ECB president, Mario Draghi, confirm that the governing council began discussions on the exit strategy of these measures to tackle the financial crisis and sovereign debt, while it is too early to implement it.
Normally, the ECB’s governing council meets on Thursday, but as this week is a holiday in some countries in the euro area, by Easter, the meeting was held today.
UniCredit Bank Experts forecast that the ECB will maintain a waiting to see the effects of the measures applied, including the injection of more than a billion euros to three years.
Despite the stabilization of the economy of the euro area, some countries still need a very low interest rates to support economic growth, while others like Germany are growing and need a higher interest rate.
The PNV economic spokesman in Congress, Pedro Maria Azpiazu, announced today that it is likely that his party an amendment to the full to the State Budget for 2012.
Azpiazu has given an interview to the radio station Euskadi Irratia in which he expressed concerns about the accounts presented by the PP government, according to the PNV on their website.
He detailed that “at present” vote is against PNV budgets (stock market research) and it is very likely that an amendment to the whole, but has qualified to be seen “how things evolve” to determine their final position group.
The nationalist MP has acknowledged that in the current accounts must be austere and include cuts, but “there’s always room to cut from one side or another and the decision of this Government has been cutting back on investment in R + D + i and in training, which will be a great detriment to the economy and its growth. ”
Azpiazu has warned that “if the government puts between their goals only deficit reduction,” the result will be “crisis.”
Also referred to a tax amnesty approved by the Government of Mariano Rajoy, to call it “shameful”. “We have to combat tax evasion with all the force of law, instead of applying amnesty,” he stated.
The PP deputy Elvira Rodriguez, said today that it is too early to assess if markets reject the general state budget presented yesterday by the Government and has been adamant in stating that there is no risk of intervention by the Spanish economy.
At a press conference, the popular MP has insisted that further convincing “the markets” (stock market analysis) and Europe that Spain is following “the path of compromise.”
In this regard, he added that not considered a failure of government debt auction today, which has placed the lowest amount set for the issue at an interest rate higher than the previous auction.
Also referred to the amendment of all to labor reform that the PSOE this morning, which the popular MP “speaks of class struggle, a time that has happened because employers and workers are now in the same boat.”
About the fund proposed by the PSOE to give credit to SMEs engaged in permanent jobs, has criticized the Socialists intend to finance it at the expense of the pension system.